The Telephone Consumer Protection Act (TCPA) was signed into law by President
George H.W. Bush in 1991 and was intended to protect consumers by restricting
telephone solicitation and the use of automated dialing equipment. Banks
and mortgage companies often use automated dialers and message machines,
known as “robocalls,” to contact consumers about account status
such as mortgage payment reminders or to demand past-due payments. Recently,
a plethora of class actions has focused on the law to go after bank and
mortgage servicers for their collection practices.
A nationwide trend has shown that TCPA violations have made for an easy
allegation in opening million-dollar payday suits against large banks
and corporations. It appears that Wells Fargo was no exception, choosing
to settle a multi-million dollar TCPA class action rather than continue
with costly litigation. The case,
Cross v. Wells Fargo Bank, was heard in Georgia U.S. District Court where the parties reached an
agreement to settle the case for $30,446,022. The filing plaintiff, Kenisha
Cross, alleged that she was not a customer of Wells Fargo but received
dozens of robocalls from the bank. She claimed that she kept receiving
phone calls even after she had notified the bank that she was not a customer
and demanded they stop.
The number of class members from the period of April 2011, through December
2015, was estimated to be 6.5 million. If each class member files a claim,
the payment would work out to approximately $4.75 per person. The agreement
is in line with other TCPA settlements that have come from various other
courts. A class action against Sallie Mae in Florida resulted in a pro
rata award of $2.63 for each member. Another class action filed against
Bank of America in California netted $3.76 per member, and a case involving
Capital One Bank resulted in payments of $4.53 for each class action member.
In a memorandum supporting the settlement, Cross wrote that the agreement
was “an excellent result considering the risks, uncertainties, burden,
and expense associated with continued litigation.” After allocating
approximately 30% of the settlement amount towards attorney’s fees,
including additional amounts for administration costs and an incentive
award to Cross, the balance will be paid out among all class members choosing
to submit a claim.
In agreeing to the settlement, Cross indicated that she had turned down
a “significant” earlier individual offer to settle because
the agreement would have done nothing to protect the class. She insisted
that the settlement is in line with other similar TCPA suits and the results
would be to fairly and adequately protect the class members.
U.S. District Court Judge Richard W. Story agreed with the plaintiff and,
in approving the agreement, said the settlement seemed to be “fair,
reasonable, and adequate.”
Alexa Stephenson directly for more information.